In the world of sea freight, there are many industry terms that are often used or understood incorrectly. One of these terms is Received for Shipment.
Received For Shipment (RFS) indicates that a shipment is received in the port by the ocean carrier, but has not yet been loaded on the nominated vessel. The carrier may issue a received for shipment bill of lading formalizing receipt of the containers, before loading. This should not be confused with a clean or an on board bill of lading.
A received for shipment clause does not guarantee that a shipment will be loaded on to the vessel. Knowing this, a shipper or consignee must also plan for contingencies due to possible delays if a shipment is not loaded.
The term ‘received’ and its related clauses are printed and found on the lower right side of the bill of lading or in the terms and conditions. Once the notification is marked as “received for shipment”, there will be no shipped on board indication on the bill of lading.
Only once it has been confirmed loaded and shipped, the RFS notification will be switched to an on board bill of lading. It will then typically show a ‘shipped on board’ date.
When Is Received for Shipment (RFS) Used?
An RFS is usually seen for shipments covered by Letter of Credit (LC). The RFS can form part of the conditions on an LC to satisfy either the buyer or bank that the cargo has been confirmed to be received/released.
It should be noted that shippers and consignees typically agree to use a clean shipped on board bill of lading for letter of credits. However, due to certain factors they may also agree on a received for shipment bill of lading, instead.
Additionally, some carriers may require a letter of indemnity. The letter indemnifies the carrier from any liability, loss, damage from documentary differences and if the containers are not loaded on the intended vessel, charges arising from detention, storage, and customs fines will be for the account of the shipper.
How Does a Received for Shipment Clause Look Like on a Bill of Lading?
The received for shipment clause is usually found on the bottom-right corner of the bill of lading or in the terms and conditions. Below is an example how the received for shipment notification is worded:
Received by the carrier from the shipper in apparent good order and condition (unless otherwise noted herein), the total number or quantity of containers or other packages or units indicated, stated by the shipper to comprise the goods specified above, for carriage subject to all the terms hereof.
Example of Received for Shipment (RFS)
To better understand a received for shipment bill of lading, you may refer to the following scenario.
In our example, a shipper and consignee have agreed to use a letter of credit upon a carrier issuance of a bill of lading. They have agreed that a received for shipment BL is sufficient to release the payment.
Let’s say the shipment consists of 3 x 40’ containers that contain fashion accessories and apparel. The shipper has stuffed the containers accordingly, arranged for haulage to port and the containers have gated in.
The carrier has also confirmed receipt of the container in the port yard. At the request of the shipper, the carrier has also issued a received for shipment bill of lading. This is a pre-printed bill of lading that confirms that the carrier has received the cargo, as the shipper has described it.
As the carrier has issued the RFS BL, the shipper must check the notation for ‘RECEIVED FOR SHIPMENT’ before submitting it to the bank or the consignee as part of the LC agreement, in order to receive the payment.
It’s important to highlight that the carrier has not confirmed that the containers have been loaded on the vessel. Only once the shipment was confirmed to have been loaded on the vessel and departed, the carrier may issue a clean bill of lading (also known as onboard BL).
Received for Shipment B/L (RFS) vs OnBoard B/L(SOB)
There are clear distinctions between a received for shipments bill of lading and an onboard bill of lading. Firstly, the received for shipment BL is a pre-printed bill of lading and acknowledges that the carrier has received the cargo at port.
On the other hand, the onboard bill of lading, also known as a clean bill of lading, confirms that the shipment has been loaded and shipped on a vessel and departed. This is indicated by a ‘shipped on board’ or ‘laden on board’ date on the BL.
Here, it’s important to understand that a received for shipment bill of lading only acknowledges the receipt of the container by the carrier, not that it has been loaded and shipped.